For CPA Firms, and Accounting Practices
Many firms struggle to scale in a competitive market. It can be difficult to keep up with ever-evolving tax laws and changing technologies while remaining cost-effective. Accounting firms that utilize scalable business solutions can improve the profitability and efficiency of their services even when their workload increases.
Building a firm with scalability as a top priority isn’t just a smart business move, it also can provide a competitive edge by increasing the firm’s agility when it comes to taking on new clients, offering Client Accounting Services (CAS), and building out an advisory service line, for example.
In working with a variety of CPA firms, KPMG Spark has identified 4 tips to help your firm optimize scalability:
Getting clear about what your firm specializes in is essential if you want to scale up. Trying to offer everything under the sun may lead to overpromising and under delivering. When clients choose an accountant, they often want someone who’s has specialized experience and skills that can support their specific needs. Niching is the way to do this. Here are some examples of niching:
There’s nothing wrong with running a general accounting firm that serves clients in multiple industries, but niching allows you to strengthen client relationships and trust because you’ll learn about the exact types of challenges that people in their niche industry have.
Another bonus to defining your niche is that it will be easier to create a marketing strategy because you’ll have an audience to engage with. For example, if you know your firm specializes in providing services to small business owners, you might target your ads to restaurant, shop, or salon owners. You’ll likely get more business from advertising directly to your ideal audience than to people who won’t benefit from your services.
Knowing what your firm does well and deciding on your core service offerings can help you create a highly scalable business. Whether it’s sales and use tax or client accounting services, make it clear to your clients what you can or can’t help them with. Clients may find it difficult or confusing to work with a firm that goes back and forth about the services they offer, so give yourself a competitive advantage and make it easy for customers to choose you. Once you’ve settled on your services, sticking with them is essential for your business strategy.
Scalable business owners can become experts in leveraging their strengths. Working on your strengths makes growth more achievable, while working on weaknesses gets you ready for growing pains. Working on both makes it easier to scale efficiently. Focus on your firm’s main strengths, and then hire or outsource all other activities associated with running your business. Appropriately outsourcing is necessary if you want your firm to be scalable.
As your company grows, you’ll need to be able to do more business with the same time constraints that you’ve always had. Creating standard operating procedures (SOPs) allows for the automation of certain processes and can save your firm time.
An SOP is a written document with step-by-step instructions that explains how to execute a task, responsibility, or process. SOPs allow for a workflow that leaves room for slow and steady growth. Running a scalable business means that your processes can not only support growth, but also produce consistent performance.
Consider developing SOPs and templates for the following:
Scalable companies introduce systems and employ standard best processes to improve efficiency and lower costs without sacrificing quality or performance. If you want your firm to expand, you need to have a scalable business model, which includes investing in technology. Technology speeds up the scaling process and can help your firm adapt to industry changes.
Investing in technology can help you avoid spending too much money on overhead costs. For example, using an outsourced bookkeeping solution instead of hiring a large in-house bookkeeping team can save your firm money on operating costs and allow you to serve more clients. KPMG Spark allows firms to offer client accounting services, such as:
Your firm can power high quality advisory services with insights from KPMG Spark. The KPMG Spark service and software allows you to automate, continuously innovate, and be prepared for growth when it happens. Support from KPMG Spark artificial intelligence and machine learning technology can help your firm better serve your customer base by adapting to their changing needs and allow you to scale-up in the process.
Even when adding more services and clients, accounting firms can have sustainable growth simply by using the right tools. By focusing on standardizing, automating, or outsourcing time consuming processes, firms can scale without constantly hiring or increasing overhead budget. Building a scalable business is not only possible, but it’s completely manageable with the right tools and technologies.
The views and opinions expressed herein are those of the author and do not necessarily represent the views and opinions of KPMG LLP.
This blog article is not intended to address or provide advice concerning the specific circumstances of any particular individual or entity and does not constitute an endorsement of any entity or its products or services.
Some or all of the services described herein may not be permissible for KPMG audit clients and their affiliates or related entities.
The following information is not intended to be “written advice concerning one or more Federal tax matters” subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230. The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.
A co-branded bookkeeping solution can help firms boost their brand’s image, build trust with clients, and continuously innovate in an industry that’s constantly changing. With the right partner, a co-branded, outsourced bookkeeping solution can help accounting firms grow and reach their business goals.
In recent years, the accounting industry has seen the development of a service model called client accounting services (CAS). Thanks to advances in cloud-based software and technology, firms can efficiently offer more clients a greater range of accounting and bookkeeping services. Firms that decide to offer CAS can better serve their clients and scale their businesses by providing these extra services.